The Uber Employment Case Reply

Driver in front of taxi waiting for clients

Uber has always maintained that its drivers are self employed but the recent case

Aslam and others v Uber BV and others 2016

The case was brought under the Employment Rights Act 1996 and the drivers involved brought the case believing there were employees.

The employment tribunal hearing began on 20 July 2016.

On 28th October 2016 the BBC reported

Uber drivers have won the right to be classed as workers rather than self-employed.

The ruling by a London employment tribunal means drivers for the ride-hailing app will be entitled to holiday pay, paid rest breaks and the national minimum wage.

The GMB union described the decision as a “monumental victory” for some 40,000 drivers in England and Wales.

Uber said it would appeal against the ruling that it had acted unlawfully.

The San Francisco-based company had argued that its drivers were not employees but self-employed contractors.

steve@bicknells.net

Are you ready for the new £1 coin? Reply

The new coin will be the most secure coin in the world!

According to http://www.thenewpoundcoin.com/

The new coin has a number of features that make it much more difficult to counterfeit.

12-sided – its distinctive shape makes it instantly recognisable, even by touch.

Bimetallic – it is made of two metals. The outer ring is gold coloured (nickel-brass) and the inner ring is silver coloured (nickel-plated alloy).

Latent image – it has an image like a hologram that changes from a ‘£’ symbol to the number ‘1’ when the coin is seen from different angles.

Micro-lettering – it has very small lettering on the lower inside rim on both sides of the coin. One pound on the obverse “heads” side and the year of production on the reverse “tails” side, for example 2016 or 2017.

Milled edges – it has grooves on alternate sides.

Hidden high security feature – a high security feature is built into the coin to protect it from counterfeiting in the future.

Old metal coin slot panel from a coin operated machine

It comes out March 2017 but will your business be ready for it, think of all the parking meters and other machines that will need to but reconfigured to accept it!

steve@bicknells.net

Autumn Statement 2016 Reply

fictitious newspapers

Phillip Hammond gave his first Autumn Statement on 23rd November 2016

As expected Brexit is forecast to reduce growth and borrowing will be higher.

But let’s focus on the Business related key points:

Employment

  • National Living Wage increasing to £7.50 from £7.20 in April 2017
  • Personal Allowances will increase to £11,500 in April and to £12,500 by the end of the Parliament
  • The Higher Rate Threshold will increase to £50,000 by the end of this Parliament
  • Salary Sacrifice is to be restricted to Childcare, Cycle to Work and Ultra-low Emmission Cars
  • Employee Share Scheme lose their income tax relief and capital gains tax exemption
  • New rules will take effect in April 2017 regarding Assets made available without transfer of ownership
  • From April 2018 termination payments could be subject to employers NIC

Corporation Tax

  • Corporation tax rates are reducing
    • Financial year 2017 19%
    • Financial year 2018 19%
    • Financial year 2019 19%
    • Financial year 2020 17%
  • From April 2017 new rules will create a restriction meaning that losses of up to 50% of profits can be offset with a £5m allowance per company
  • From April 2017 corporation tax relief for interest will be restricted where the interest is over £2m

VAT & Insurance Premium Tax

  • Insurance Premium Tax is going up to 12% in June 2017
  • A new 16.5% Flat Rate will be applied to businesses in the Flat Rate Scheme with limited expenses such as Labour Only Contractors, the new rate starts in April 2017

Tax Avoidance

  • Changes to the Flat Rate Scheme should generate £695m by 2021/22
  • The Government will push ahead with the introduction of a new penalty for a person who enables another person or business to use a tax avoidance scheme that is defeated by HMRC
  • HMRC will increase the number of court cases

Property

  • The introduction of £1,000 property income allowance from April 2017
  • Letting Agents will no longer be able to charge renters fees

steve@bicknells.net

Should Income Tax and National Insurance be merged? Reply

Pay Packet And Banknotes

On the 14th November 2016 published Closer alignment of income tax and national insurance: a further review

ni-and-tax

The Office of Tax Simplification (OTS) are therefore recommending that government make changes to make NI more like PAYE.

This isn’t a new idea, its been kicked around since 1943! and George Osborn said it was good idea in his last budget

Will it get a mention in tomorrows Autumn Statement?

steve@bicknells.net

 

Do we need lookthrough taxation? NO Reply

the mirror

This month (November 2016) the Office of Tax Simplification published their Final Report on Lookthrough Taxation.

The proposal was that for Small Companies instead of charging the company tax (corporation tax), tax (income tax and national insurance) would be charged directly on the stakeholders based on their share of the profits. The end result being that Small Companies are treated in the same way as Sole Traders.

Back in July the OTS asked this key question Overall would lookthrough deliver simplification? and the answer was NO

Many suggested that it would discourage entrepreneurs and reduce funds retained in the business.

There are also complications such as Directors Loan Accounts and Salaries (including to family members).

Introducing lookthrough tax would have meant shareholders would be subject to Income Tax and Class 4 NI on company profits.

This could be the for runner to a longer study comparing Employees to Sole Traders to Companies.

For now common sense has prevailed.

The OTS report states Our conclusion is that lookthrough does not offer sufficient simplification to justify its introduction. On balance we feel that it would be more complicated than the current tax system, given the additional rules that would be needed

steve@bicknells.net

 

 

Are you stressed about Black Friday and Cyber Monday? Reply

Surprised OMG shocked woman

Christmas is coming, its time to buy presents and that means Black Friday (Friday 25th November 2016) and Cyber Monday (Monday 28th November 2016).

It’s a frenzy of present buying!

Last year UK shoppers spent £3.3 billion between Black Friday and Cyber Monday, Amazon reported selling 7.4 million items on Black Friday 2015 and £968 million was spent on Cyber Monday.

black-friday

In 2005, Shop.org coined the term “Cyber Monday” after analyzing increased Internet traffic and sales on the first day that most people return to work after the holiday weekend.

Since its inception, online consumers have started to spread the word about Cyber Monday. Between 2006 and 2011, online sales doubled to over 1.2 billion dollars on Cyber Monday. The success of Cyber Monday has made itself known all around the world, including Canada, the United Kingdom, and all over Europe.

Are you ready to spend spend spend! buy buy buy!

steve@bicknells.net

Does LISA take your fancy? Reply

fotolia_121789142_xs-lisa

Actually, this isn’t a blog about the Mona Lisa its actually about Lifetime Investment Savings Accounts (LISA).

LISA’s are available from April 2017 and are a retirement saving option.

  • Save up to £4000 per year
  • You must be aged between 18 and 40
  • Anything paid in will be topped up by 25% at the age of 50
  • Over the age of 60 you can take out all the money tax free
  • If you take it before 60 you lose the 25% bonus and get a 5% charge

lisa

Personally, I don’t think they sound great, if you want to save for retirement why not just save in a pension?

If you want to save in a bank why not just use the Personal Savings Allowance which started in April 2016.

The PSA will apply to all non-ISA cash savings and current accounts, and will allow some savers to receive a generous portion of their interest totally free of tax.

Its expected that 95% of savings will no longer be taxed.

Basic rate taxpayers will receive £1,000 in savings income tax free, higher rate taxpayers get a band of £500 and additional rate tax payers get nothing.

steve@bicknells.net

2016 will beat our previous blogging and tweeting records! Reply

blog-hits-2016-nov

We have already beaten last year and we still have 2 months to go!

So why do people read our blog?

  1. Useful Content – We learned a long time ago that if you want followers and readers you have to write about things that will interest as wider audience as possible. My blog is about Accounting and Tax, which you might think is boring but it does affect everyone, we all pay tax! and there is plenty to blog about.
  2. Accurate Content – Its important to get the content right but even if you do make a mistake you can bet your life someone will tell you. Fortunately most readers are very helpful and will also contribute suggestions.
  3. Regular Posts – you have to post regularly, we post 2 or 3 times a week, we prepare them in advance and schedule them
  4. Variety – we try cover a wide variety of topics and our audience appreciate it, we even get special requests
  5. Pictures – Blogs without pictures, charts and graphics are boring
  6. Share – Post your blogs every where on Social Media and encourage others to do the same
  7. Pick a good title – The title will be found by search engines so try to think about what someone might search for
  8. Video – You Tube has plenty and most people would love you to link to their video as it will increase their hits as well as yours
  9. Infographics – we love infographics and we try to create my own when we have time
  10. Keep it simple – Lets face it Tax is complicated, so we try not to make the blogs too complicated otherwise we will lose followers

According to Hashtagify we are now the 2nd and the 5th most influential tweeter on Self Assessment

self-ass-nov-16

steve@bicknells.net

http://www.stevejbicknell.com

Why do we need invoice finance? Reply

Pay up.

73% of UK SME’s have experienced late payment in the last 12 months and on average are paid 41 days later than the terms agreed.

This is despite moves to try to improve things like the Prompt Payment Code

The Prompt Payment Code (PPC) aims to improve the supply chain cash flow for UK firms by tackling the issue of late payment.

The Code is sponsored, hosted and administered by the Institute of Credit Management (ICM) on behalf of the Department of Business Innovation and Skills (BIS).

Code signatories undertake to:

pay suppliers on time

  • within the terms agreed at the outset of the contract
  • without attempting to change payment terms retrospectively
  • without changing practice on length of payment for smaller companies on unreasonable grounds

give clear guidance to suppliers

  • providing suppliers with clear and easily accessible guidance on payment procedures
  • ensuring there is a system for dealing with complaints and disputes which is communicated to suppliers
  • advising them promptly if there is any reason why an invoice will not be paid to the agreed terms

encourage good practice

  • by requesting that lead suppliers encourage adoption of the code throughout their own supply chains

The Prompt Payment Code has the backing of the UK Government, the British Chamber of Commerce (BCC), the Confederation of British Industry (CBI), the Forum of Private Business (FPB), The Federation of Small Business (FSB) and the institute of Directors (IoD).

Financial software firm XERO issued the research, which revealed that:

  • Over half (52%) of UK business owners worry about unpaid invoices
  • Worst affected regions found to be London where businesses spend 1.5 days per month chasing payments, followed by 1.3 days by businesses in Wales
  • The business sector spending the most time chasing payments was found to be HR (3 days), followed by IT & Telecoms (1.8 days) and Manufacturing & Utilities (1.7 days)

It also showed that the two main reasons cited by small business as being the causes of late payments were that their customers were also waiting for payments themselves (32%), as well as a lack of consistency on payment terms (27%).

For SME’s understanding their Cash Cycle is critical as lack of cash flow will kill your business, here is a example of how to calculate the cash cycle

cash-cycle

This means that you need enough cash in your business to finance 50 days worth of sales. If your sales are £1,000,000 per year, you will need cash of £136,986. In practice, your business will probably need more cash available than this to pay for rent, rates, wages etc. You may also get cash spikes at the quarter end if you pay VAT.

Here is a brilliant Cash Flow Improvement Tool from NAB http://oms.nab.com.au/media/10/power_of_one/CF.html

This model quickly and easily calculates your cash cycle but also shows the effect of making improvements.

Having discovered what the cashflow cycle is, what can you do to improve it? well that depends, assuming you have agreed the best possible terms with your suppliers, you need to find ways to speed up cash received from Customers, if your business Sells to other businesses the first thing to look at is Credit Management.

CIMA have produce a comprehensive guide http://www.cimaglobal.com/Documents/ImportedDocuments/cid_improving_cashflow_using_credit_mgm_Apr09.pdf.pdf

But Credit Management may not be enough on its own, perhaps Invoice Finance might help?

Invoice discounting is an excellent, cost-effective way for certain businesses to improve their cashflow position.

  • Invoice discounting is most suitable for businesses with good financial controls in place and a strong financial background.
  • Invoice discounting is suitable for business with an established credit control department.
  • Invoice Discounting is suitable for a wide range of businesses including manufacturers, wholesalers, transport firms, employment agencies and providers of some business services.
  • Suitable businesses for invoice discounting are growing businesses because the level of funding grows in line with increasing sales.

In August 2013, the UK Government became a Buyer of invoices on the MarketInvoice Platform, investing directly in UK SMEs looking to access working capital and grow their businesses.

How does it work?

Any company can use MarketInvoice provided its sells goods or services to other large businesses.

Its a ‘pay as you go’ service.

Companies are vetted and the invoice must be to a large corporate not to other SME’s.

Its confidential so your customer will not know you have used MarketInvoice, if the customer doesn’t pay you will have to refund the investor.

There are other similar products on the market from other providers so its worth considering the options available.

Don’t let lack of cash flow kill your business!

steve@bicknells.net